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Vice Mayor Mike Haynes
An idea whose time has not come ...


The town of Farragut was incorporated in 1980 and has been remarkably successful during its 27-year history in attracting new residential developments and quality commercial facilities.

Our population is now in excess of 20,000, with more than 75 subdivisions and more on the way. We are also experiencing unparalleled growth in both large and small businesses from Turkey Creek/Parkside, to the new Kroger development, to the Renaissance Center at Dixie Lee Junction, and many places in between.

From the beginning Farragut has sought to upgrade and steadily improve our infrastructure of roads and create a readily accessible series of neighborhood parks in all four quadrants of the Town.

Of course, carrying out those ambitious plans would be a challenge for any new municipality across our 16 square miles of territory, but it is especially true when you remember our Town founders made — correctly in my view — the critical threshold decision that Farragut would not charge residents a separate property tax (we already pay one as Knox County residents). Instead, the Town provides services with income primarily derived from local sales tax and state-shared revenues. That all-important “no-tax” philosophy has required each successive group of Town leaders to expand our facilities carefully with much strategic planning and by wisely utilizing grants and matching county, state and federal funds whenever possible.

The vast improvement through the years of our road system by our annual repaving/resurfacing program and ambitious capital projects (Campbell Station extension, McFee Road widening, and just last week, the authorization of Watt Road extension being recent examples), our three beautiful and heavily used Town parks (with groundbreaking for our fourth on McFee Road earlier this summer), and the continued quality growth within Farragut of both residential and commercial development all testify to the success of this approach.

The challenge, of course, is always to maintain this balance wisely and chart our future plans in such a way that we will not impede either quality growth or the delivery of quality services to our residents. Good commercial development provides convenient services and a growing source of sales tax revenue, while new residential areas provide beautiful homes and well-planned neighborhoods for our enlarging population or residents who wish to relocate within the Town itself.

In recent years the Tennessee Legislature passed State laws which allow some counties and Tennessee cities to enact “impact-fee” ordinances, which are one-time charges for new commercial or residential developments that, at least in theory, help pay in advance for anticipated infrastructure costs related to that development. The amount of payment is typically based on a complex formula which can vary from location to location and is usually aimed at supporting the burden of new residents on schools or new required roadways. While nearby Loudon County enacted such a fee last year, only five cities have taken such action in Tennessee to date. Most have not followed suit.

In 2006, as part of our ongoing evaluation of revenue sources, Farragut hired Duncan Associates from Texas to conduct a study of our unique circumstances and Town responsibilities and to develop a possible formula for such an impact fee if Farragut were to choose such an approach. The resulting report and proposed ordinance have now been discussed at two recent Town Forums in May and August, and it is scheduled for a vote on September 27 at the Board of Mayor and Aldermen meeting. In part, Duncan recommends an upfront fee of $3,670 per new single family residence regardless of size and $2,614 per every 1,000 square feet of new commercial space being developed (without right-of-way) and with the funds earmarked solely for roadways and parks.

After much study, discussion, and a thorough review both of our Town’s history and potential, I have decided that adopting such an ordinance would not be appropriate and could actually be harmful to Farragut’s future. Therefore, I intend to vote “No” on impact fees for Farragut.

Whatever you wish to call it, in reality this ordinance represents a one-time tax on growth. Our Town founders wisely elected not to add more tax burden to our residents (and future residents), and without a compelling reason to do so, such as dire financial straits, I don’t think we should change that philosophy. Farragut is debt-free, in excellent financial shape, and we have more than adequate resources to fund our limited range of services (which, remember, does not include schools, law enforcement or fire protection). We are also in the midst of an historic growth of commercial development in almost every area of the community. Each of those new businesses will bring with them a long-term stream of sales tax revenue – ones that could very well never arrive if up-front development costs escalate beyond competitive pricing of commercial property just beyond our borders, and it would be tragic to lose dependable long-term income for a one-time fee. Remember too that the town of Farragut did not pay for the original development of Parkside Drive, and Kingston Pike is maintained by the state, both areas

of increased commercial

development.

On the residential front, I still remember how my family struggled financially to purchase our first home within the Town, and I am very concerned about increasing those housing costs by almost $4,000 on every new home regardless of size. It will also eventually affect friends and neighbors who are here now if they decide to “downsize” to a new condominium, for example, and still stay within the town of Farragut. And, while an impact fee, if adopted, would be charged on all new residential development, in reality not every new site will need access road upgrades. In the past we have successfully negotiated a cost sharing with developers where needed, and those funds have been used to improve that particular location immediately before the development is built. Under the suggested ordinance the funds are restricted only to general roadway improvement within the Town, and the work can be delayed several years. Granted, that negotiated sharing process has been somewhat subjective, but I believe it has worked in the past, and with some thoughtful review and changes, I believe it offers a less-intrusive and more appropriate alternative than the impact fee/tax approach overall.

The town of Farragut has become the most desirable residential community in East Tennessee, won numerous awards for design and quality, and has a growing commercial base that will ensure sufficient financial resources to maintain those high standards we have all come to expect in our community. All of this has been achieved without imposing unnecessary fees or taxes, and there is no reason to start now as we move forward in confidence toward our fourth decade. Impact fees, in my opinion, are an idea whose time has simply not come to Farragut.

 

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